In part because of the legacy of war and government mismanagement, more than 50 percent of Myanmar still lacks basic physical infrastructure -- electricity, usable roads, and rails -- of the kind that were taken for granted by investors coming into China and Vietnam, or other Asian tigers like Malaysia and Thailand. Worse, unlike Vietnam or China, the Myanmar government still has little control over many large areas of the country, making investment in these regions -- which also happen to be the center of major oil, gas, and mining deposits -- extremely risky. And neither the government nor the opposition has come up with a workable plan for creating an effective federal state system in one of the most ethnically diverse nations in the world. Without a system like Indonesia's that devolves political power and control of resources to the sub-provincial and village level, Myanmar's ethnic minorities are unlikely to ever see themselves as citizens of the country, said Tin Maung Than, a longtime Myanmar diplomat who is now a researcher at the Myanmar Development Resource Institute, one of the new think tanks launching in the country.
Complicating things further is the fact that Thein Sein's government, while signing ceasefires with some ethnic armies, has also simultaneously ramped up attacks against the Kachin Independence Army (KIA), a major ethnic insurgent group in the north of the country. Both sides have been accused by Human Rights Watch of massive atrocities, including killing civilians, forcing children to fight, and using forced labor and portering. The Kachin appear to be buying up arms, and Thein Sein himself appears to have limited control of how the military and his regional commanders fight the Kachin war, a worrying sign if the country is going to be a democracy in the future. Tens of thousands of Kachin refugees have fled the fighting, with some crossing the border into China and others stranded in some of the coldest and most inhospitable parts of Myanmar.
Meanwhile, the government has done little about another powerful ethnic insurgency in the northeast of the country, the United Wa State Army (UWSA), which is believed to be among the biggest narcotrafficking organizations in the world and which has tens of thousands of men under arms. Instead, the government appears to be continuing the longstanding policy of ignoring the narcotrafficking militia, much to the dismay of neighbors like Thailand, which absorb the majority of the UWSA's potent methamphetamines. As a result, areas controlled by the UWSA, the KIA, and some other ethnic armies, are essentially beyond the control of the central government.
Moreover, just because Than Shwe and the other top generals have formally retired does not mean they are not pulling some strings from behind the scenes. Several close observers of parliament say that Than Shwe has seeded the ruling party with hard-liners who will make sure that any reforms proposed by Thein Sein or Suu Kyi don't get too far, too fast. If the NLD were to win the 2015 election, these hard-liners, through the military's seats in parliament, could hinder change or squash it completely. In addition, the constitution still gives the military the right to step back into power if it feels it is necessary, in the case of a national emergency, thus essentially offering the possibility of a coup at any time in the future. While Than Shwe, Maung Aye, and other senior officers retired with considerable wealth, younger officers did not get a chance to amass significant assets before the transition. Instead, these middle-ranking officers may find themselves without a job, and without the access to government funds and natural resources deals that their superiors received before retiring. This could be yet another powder keg in the country's fractious transition. Angry that their old guard cashed in, but they could not, these middle-ranking officers could easily see justification, like each successively younger class of army officers in Thailand, to stage a coup when there is even the pretext of mild unrest.